The provisional safeguard measures imposed earlier this year by the European Commission under the form of a quota system remain under observation. The measures are set to remain in place until February 2019, but the authorities can make them permanent at that stage.

After a slow start, the utilisation of the quotas allocated is now rapidly increasing. According to Kallanish calculations, over 20% of the quotas for hot-rolled coils have been used so far, for example, leaving some 3.3 million tonnes of quotas still available. More than 23% of the quotas dedicated to metal-coated coil have also been utilised.

For long products almost 35% of the quotas for rebar have been used so far, leaving less than 500,000t of tariff-free quota available. In the tube sector the percentage is even higher, with almost 40% of tubes for gas appliances and hollow sections quotas having been used already.

Senior market analyst Georges Kirps tells Kallanish that it is premature to speculate on the decision of the European Commission based on today’s import data.

He adds, nevertheless, that during the first eight months of 2018 imports of flat products included in the safeguard system increased by only 0.4% year-on-year. “Obviously the existing AD duties on a number of flat products have already the necessary effect on non-EU import flows and might even further reduce it towards the end of the year. So, one of the possible options for the EU Commission might eventually be to consider safeguards on flats as superfluous,” he says.

For long products the situation appears to be more complex, given that imports into Europe increased by some 38% y-o-y during the January-August period. Kirps notes nevertheless that the longs market is cyclical and that these imports could fall towards the end of the year.

The tube market also finds itself in a critical position. “Non-EU imports of tubular products included in the safeguard system have been rising by 15 % in the first eight months of 2018,” Kirps says. “The announcement of an AD investigation regarding imports of hollow sections and welded tubes originating from FYROM, Russia and Turkey will surely slow the flow of tube imports in the rest of 2018, as hollow sections and welded tubes constitute the bulk on non-EU imports of tubular products under provisional safeguard measures.”

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